Correlation Between Mfs Prudent and Mfs Total
Can any of the company-specific risk be diversified away by investing in both Mfs Prudent and Mfs Total at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mfs Prudent and Mfs Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Prudent Investor and Mfs Total Return, you can compare the effects of market volatilities on Mfs Prudent and Mfs Total and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mfs Prudent with a short position of Mfs Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Prudent and Mfs Total.
Diversification Opportunities for Mfs Prudent and Mfs Total
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Mfs is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Prudent Investor and Mfs Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Total Return and Mfs Prudent is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mfs Prudent Investor are associated (or correlated) with Mfs Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Total Return has no effect on the direction of Mfs Prudent i.e., Mfs Prudent and Mfs Total go up and down completely randomly.
Pair Corralation between Mfs Prudent and Mfs Total
Assuming the 90 days horizon Mfs Prudent is expected to generate 1.28 times less return on investment than Mfs Total. But when comparing it to its historical volatility, Mfs Prudent Investor is 1.05 times less risky than Mfs Total. It trades about 0.26 of its potential returns per unit of risk. Mfs Total Return is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 939.00 in Mfs Total Return on December 1, 2024 and sell it today you would earn a total of 19.00 from holding Mfs Total Return or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Prudent Investor vs. Mfs Total Return
Performance |
| Timeline |
| Mfs Prudent Investor |
| Mfs Total Return |
Mfs Prudent and Mfs Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Prudent and Mfs Total
The main advantage of trading using opposite Mfs Prudent and Mfs Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Prudent position performs unexpectedly, Mfs Total can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mfs Total will offset losses from the drop in Mfs Total's long position.| Mfs Prudent vs. Eaton Vance Worldwide | Mfs Prudent vs. Health Care Ultrasector | Mfs Prudent vs. Highland Longshort Healthcare | Mfs Prudent vs. Allianzgi Health Sciences |
| Mfs Total vs. Global Gold Fund | Mfs Total vs. Europac Gold Fund | Mfs Total vs. Investment Managers Series | Mfs Total vs. International Investors Gold |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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